Environmentalists are warning that Koalas could face extinction, as rapid urbanization destroys their fragile habitat. The Australian Koala Foundation says the Koala population is on the decline. The group is urging the government to declare the animal a vulnerable species.

There are about 100,000 koalas in Australia. At the time European settlers arrived in the late 18th century, it is estimated there were between seven and 10 million.

The animals are protected by law. But the eucalyptus trees they rely on for food are not, and seem to be vanishing.

Koalas are considered the world's most lovable marsupials. 'Koala' is an aboriginal word meaning 'no drink.' It is an appropriate name, because these unique animals get all the moisture they need from eucalyptus leaves.

Koalas have no animal predator, but these small mammals were hunted in the millions for their silver fur. More recently, they face another danger: urban sprawl, which has caused their population to decline. Many are hit by cars or attacked by dogs.

The Australian Koala Foundation surveyed 1,000 habitats, and found up to a third no longer had a koala in them. Most of the rest had suffered widespread destruction.

Deborah Tabarat, executive director of the foundation, says Australia needs to do more to protect this iconic animal.

"This animal brings 2.5 billion [Australian] dollars-worth of tourism to our shores. This animal is universally loved, and it is not owned by Australia,? she said. ?This is a global animal. Let's start with a bit of dignity for a start. Let's start, and say, 'This animal is important to this country.'"

The foundation says the outlook for koalas along Australia's eastern seaboard is extremely grim, and the animals could disappear in the next two decades.

But the federal government challenges these claims. Environment Minister David Kemp says he has consulted widely with the scientific community, and despite some health issues, koalas are not vulnerable to extinction.